A visually impaired masseur’s story highlights how excessive compliance can limit access to fiduciary advice for ordinary Indians, including persons with disabilities.
My friend Raju Chavan lost his eyesight at 21, due to a medical error. Determined to rebuild his life, he trained as a masseur and now earns a modest but dignified living in Mumbai. When he asked me about long-term investing, I suggested a simple SIP in a mutual fund. Instead, his banker sold him an endowment insurance policy–conveniently omitting any mention of his disability. I had to step in, get the policy cancelled, and ensure his money was refunded, before finally helping him begin the SIP he wanted.
Stories like Raju’s underline why India needs a strong, trustworthy advisory profession.
Accessibility requirements as an example
I thought of Raju when I read SEBI’s recent circular requiring all registered investment advisers (RIAs) to make their digital assets accessible to persons with disabilities, and to certify this through an accessibility audit.
Out of curiosity, I ran our website through Google Lighthouse. It scored 87 on mobile and 94 on desktop, with suggestions for improvement. We are committed to raising that to as close to 100 as possible.
The concern arose when I examined the audit requirement. Currently, there are only about 10 empanelled IAAP auditors, with just one in Mumbai. Industry colleagues reported audit quotes running into several lakhs, with timelines stretching into months–and this would be a recurring annual exercise.
For small advisers, especially solo practitioners with bare-bones websites maintained only to meet regulatory norms, these costs are prohibitive. Even mid-sized firms like ours would feel the strain. Ironically, since smaller advisers are often the ones most likely to serve persons with disabilities, such costs could reduce accessibility rather than enhance it.
The fiduciary standard
I have always believed that good professionals naturally put their clients’ interests first. What sets investment advisers apart, however, is that regulations explicitly require this fiduciary duty–with the prospect of losing one’s licence if it is breached.
This high standard rightly distinguishes advisers from most other financial intermediaries. But it also means the compliance framework must be proportionate. If procedural requirements become disproportionately heavy, there is a risk that advisers’ focus may shift away from what matters most–serving clients’ best interests.
This also highlights the uneven playing field: a solo RIA faces a mountain of compliance compared with a distributor of AIFs, mutual funds, or PMS products. Distributors are technically not meant to provide advice–but in practice, nothing stops them from doing so free of charge. The difference lies in regulatory expectations: advisers carry a far heavier compliance load.
Over time, layers of obligations–some from other regulators, others from judicial pronouncements–have accumulated into a complex maze. Distributors, since they are not SEBI-registered, are not subject to similar requirements. This creates an uneven playing field. Certain requirements were originally designed to curb trading-call providers, who are no longer eligible to register as advisers–raising the question of whether such rules remain relevant.
This article attempts to comprehensively list the compliance burdens faced by a solo RIA–burdens that simply do not exist for distributors. For many, this choice determines whether they join or abandon the profession.
The compliance burden across an adviser’s journey
For a solo adviser, compliance is a constant companion: from applying for a licence, to setting up the practice, to running day-to-day operations. Large firms absorb this through compliance departments. For an individual, the burden falls entirely on their shoulders.
1. Applying for a licence
From the very start, an aspiring adviser must navigate:
– Mandatory qualifications and exams.
– Extensive paperwork, multiple declarations, and business plans.
– Proof of income, assets, and liabilities (some requirements are now proposed to be dropped).
– Infrastructure details–a huge hurdle for solo advisers.
– Manual, time-consuming filing and follow-up with the regulators.
– A ₹1 lakh fixed deposit with lien in favour of BSE–a locked sum, difficult to process with banks.
A few simple steps for a distributor can be an exhausting process for an adviser.
2. Setting up the practice
Once licensed, a fresh wave of registrations and obligations begins: CKYC, KRA, FIU, CEFCOM, UPI handles, accessibility-compliant websites, TRAI numbers, compliance audits, SCORES, Smart ODR, wall displays of licences and qualifications, grievance redressal mechanisms, and more.
Each item may be routine for a large firm, but for a solo adviser – it means high costs, delays, and constant firefighting.
3. Ongoing operations
Compliance continues. Annual audits, half-yearly filings, periodic exams, suitability checks, record-keeping for every client interaction, grievance redressal, regulatory inspections, and repeated PMLA/KYC updates all demand time and money.
Every email, phone call, or document containing advice must be recorded, signed, and preserved for five years. Marketing material and advertisements need prior approval. Even family members’ distribution activity has to be monitored. The obligations are demanding—and relentless.
The bigger picture and what can be done
The number of individuals entering the profession is itself a measure of its health. Almost every large corporation began with a single person’s imagination, often from a desk at home. Preserving that entry path is critical. While compliance burdens weigh on mid-sized and larger firms too, this article focuses on the single-person practice. There are also additional obligations for non-individual RIAs, which are not covered here.
SEBI has been a responsive regulator, taking positive steps on many fronts. At the same time, this is an opportunity for a more holistic review.
So, what can be done? Here are my personal views:
– Investment advisers already face the challenge of a weak fee-paying culture. Though this is slowly changing, real scale will come only when many more professionals offer these services and clients get accustomed to paying for advice.
– Advisers do not handle client money or securities, and most are not linked to entities that do. Compliance requirements should be framed in that context and adjusted accordingly.
– Regulations define “financial planning” as a subset of investment advice. In practice, financial planning is broader and more holistic, with investment advice as only one component. Forcing financial planners to identify solely as investment advisers narrows the scope of what they do. Professionals who practise comprehensive financial planning should be free to describe themselves as such, not compelled to use only the term “investment adviser.”
– Some of the more onerous requirements–originally designed for trading-call providers–could be dropped altogether for advisers.
– Compliance could be applied on a graded basis. For instance, firms with fewer than 10 complaints on SCORES in a year could be given leeway, with full requirements kicking in only once that threshold is crossed.
– Individual advisers should be permitted to offer both fee-based advisory and distribution services (not simultaneously to the same client). SEBI itself proposed this in its third consultation paper of January 2020. This flexibility is already available to non-individual RIAs and should be extended to individuals so that it serves as an easy entry path for distributors.
While SEBI has already taken several steps, a more comprehensive review could better support the profession’s revival. But incremental, piecemeal fixes will not revive the profession. What is needed is a comprehensive review, followed by sustained nurturing until the profession finds its footing.
A profession has no inherent claim to survive unless it serves a larger social purpose. Fiduciary financial planning and investment advice clearly does. “A financial plan for every Indian” could be a powerful enabler of Viksit Bharat by 2047. Allowing this profession to wither would only hand the space back to unregulated players–a setback for Indian citizens, including differently abled individuals like Raju Chavan, who stand to gain most from reliable, regulated advice.
The writer heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor; X (formerly Twitter): @harshroongta
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.CNBCTV18.com or the Business Standard newspaper
(A slightly different version of this column first appeared in the CNBC TV18 on September 2, 2025)